Washington Post Profit Plunges 77%
The Washington Post Co.'s reeling newspaper and magazine divisions stumbled again in the fourth quarter, extending an earnings slump that would have been even more disconcerting if not for the stability of the company's education and cable TV businesses.
The publisher of The Washington Post and Newsweek magazine said Wednesday that it made $18.8 million, or $2.01 per share, during the final three months of last year. That represented a 77 percent drop from net income of $82.9 million, or $8.71 per share, in the same quarter a year earlier.
The results for the last quarter included after-tax charges of more than $82 million to account for the eroding value of the company's newspaper holdings, the upcoming closure of a Maryland printing plant and restructuring costs.
It marked the Washington-based company's ninth consecutive quarter of declining profit.
Revenue rose 3 percent to $1.16 billion.
Washington Post Co. shares fell $2.70 to close at $382.30 Wednesday.
Like most publishers across the United States, the company's publications have been losing advertising revenue to the Internet for several years. The pain has been exacerbated during the past six months by a devastating recession that has waylaid retailers, banks, auto dealers and builders _ traditionally all big buyers of newspaper ads.
Unlike many other publishers, the Post company has a safety net _ two large divisions that aren't dependent on advertising.
Its educational unit, Kaplan, and cable TV arm, Cable One, have been doing so well that they collectively bring in far more money than the ailing newspaper and magazine divisions that had once been the company's cornerstones.
"It's the advertising-based businesses that are really pulling them down," said newspaper analyst Ken Doctor of Outsell Inc. "It's very stark."
Kaplan's fourth-quarter operating profit grew 54 percent to $61 million on revenue of $609 million, which climbed 13 percent from the prior year. In cable TV, the operating profit increased 37 percent to $46 million on revenue of $184 million, up 11 percent.
The strength of Kaplan and Cable One has enabled the Post company to maintain its quarterly dividend at $2.15 at a time when other newspaper publishers have been reducing or eliminating the payments to shareholders.
Meanwhile, newspaper revenue sank 13 percent to $201.7 million in the fourth quarter. The misery was concentrated in the print editions, where the company's revenue shrank by nearly $28 million, or 21 percent, from the comparable 2007 period. The company fared better online, but the $1.8 million uptick in the Internet operations wasn't nearly enough to offset the print declines.
The company previously announced plans to close its College Park, Md., plant later this year to save money.
For the full year, the company's net income dropped to $65.7 million, or $6.87 per share, from $289 million, or $30.19 per share, in 2007. Full-year revenue climbed 7 percent to $4.46 billion.
AP Business Writer Andrew Vanacore in New York contributed to this story.